US polyethylene (PE) contracts settled down by 2 cents/lb ($44/tonne, €34/tonne) in November on generally weak demand, sources said.

Producers had initially sought a 5 cent/lb increase for the month, but had downgraded expectations to a flat settlement earlier in the week ended 30 November.

However, by the afternoon of 29 November, NOVA Chemicals announced to customers it was cancelling its previously announced increase and would drop the November price by 2 cents/lb, according to a customer letter.

Other producers followed suit, with most producers agreeing to meet the competitive by the morning of 30 November, sources said.

One producer, who said it had agreed to a 2 cent/lb reduction, said it saw no real fundamental reason for a decrease, adding that its sales volumes for the month were stronger than in September and October.

"It was purely a competitive decision," the producer said. "Our demand is projected to be higher than it was in October and September, which means that customers want more of our material. I can't see why prices should go down if people want more."

Buyers, on the other hand, said they were seeing very weak demand for November. That, combined with growing producer inventories, a relatively weak export market and lower feedstock ethane costs, was more than enough reason for prices to fall, buyers said.

"There is no reason why prices should not fall," said one buyer, who said it was already seeing lower spot prices from brokers. "Everyone has got material and there is relatively slow demand."

With the November settlement, current prices for linear low density polyethylene (LLDPE) butene film were at 65-68 cents/lb DEL (delivered), low density polyethylene (LDPE) film prices were at 74-77 cents/lb DEL and high density polyethylene (HDPE) blow moulding prices were at 63-65 cents/lb DEL, for small volume buyers, as assessed by ICIS.